Thursday, June 30, 2011

According to the Wikipedia entry (OK, maybe not the most reliable source, but it is the fastest), “American exceptionalism” is the notion “that the United States is qualitatively different from other nations.” The first person to say so (although not in those exact words) wasn’t even American, but French – Alexis de Tocqueville. While sometimes thought of as a doctrine embraced mostly by isolationists and others on the right wing of the political spectrum, according to Wikipedia, internationalist Communists were there first to coin the phrase, as an excuse for why the supposedly historic inevitability of Communism was such a miserable failure in the United States

We occasionally see American exceptionalism at work in prescription medical product liability litigation. Sometimes it takes a raw, rather nasty incarnation – as when plaintiffs’ lawyers attempt to incite nativist suspicions, or worse, in juries when the defendant is a company based in Europe, Japan, or more frequently these days India or China. In one recent example, a plaintiff offered an “expert” in “Chinese culture” who could “‘see beyond the facade in China’ in a way that others cannot,” for the purpose of saying that the defendant should never have bought anything Chinese made. In re Heparin Product Liability Litigation, 2011 WL 1059660, at *9 (N.D. Ohio March 21, 2011). Fortunately, the court resoundingly rejected this rank attempt to appeal to anti-foreign prejudices. First, they were purely a product of the expert’s prejudices, and had nothing to do with the facts of the case:

[The expert’s] opinions with regard to the common practices of Chinese manufacturers and suppliers have not been tested or subjected to peer review or otherwise corroborated. At his deposition, [he] asserted that his conclusions are based on “common knowledge” and incapable of support by statistical data . . . .

[The expert’s] opinions are entirely personal, based on his own and, to be sure, relatively extensive, experience with a broad range of businesses in China. But [the expert] sees those experiences and the views they have created through the lens of subjectivity. . . . [He] has no basis to apply his opinions reliably to the pharmaceutical industry. He has no professional experience with pharmaceutical . . . manufacturing outside of this litigation. . . . [N]owhere does he explain how his observations about Chinese business practices relate to the Defendants.

Id. at *10-11. Second, the entire subject was simply a blatant appeal to juror prejudices, and had no business in a product liability trial:

Whatever slight probative value his opinions might have is substantially outweighed by the risk of unfair prejudice. His generalized opinions about Chinese culture and business practice have no link to the parties involved in this case and have a serious risk of prejudicing the jury. Courts repeatedly exclude this type of testimony because the risk of racial or ethnic stereotyping is substantial, appealing to bias, guilt by association and even xenophobia. Accordingly, Defendants' motion shall be granted.

Id. at *11 (citation omitted).

Another aspect of American exceptionalism in product liability litigation, however, is not only more benign but also substantially accurate. That’s the reluctance of courts to allow juries to hear about foreign regulatory activities. After all, it’s demonstrably true – going back to the Thalidomide tragedy of the early 1960s, if not before – that the regulatory standards of various countries differ significantly. For better or worse (mostly for better), prescription medical products in the United States are regulated by the FDA, and not bound by disparate standards imposed by regulators in other countries.

We’ve touched upon the issue of admissibility of foreign regulatory activities before, but never in a systemic fashion. We think we’ll try to kill it today.

The first appellate cases dealing with attempts to import the product regulations of other countries into American product liability litigation didn’t involve drugs. In Tews v. Husqvarna, Inc., 390 N.W.2d 363, 366 (Minn. App. 1986), the plaintiff tried to have his expert testify about Swedish standards for chain saws in order to imply that the Swedish defendant manufacturer should have followed Swedish rather than American regulations for saws sold in this country. The trial court excluded the purported evidence, and on appeal was affirmed:

[T]he trial court did not err in excluding testimony concerning the legal requirements for chain brakes in foreign jurisdictions . . . . [W]hile technology available in other jurisdictions is relevant, legal standards in other jurisdictions are not. We cannot say that the trial court abused its discretion in excluding this evidence.

The identical issue in Tews also arose in Deviner v. Electrolux Motor, AB, 844 F.2d 769 (11th Cir. 1988). The trial court likewise held that “Swedish Standards are not relevant in a U.S. product liability case involving a saw sold in the U.S. in 1981.” Id. at 771 n.3. The Court of Appeals affirmed, holding that “The District Court’s desire to avoid confusing the jury with Swedish law and statistics cannot rightly be described as abuse of discretion, when the issues aris[e] under Alabama and federal law.” Id. at 773.

A few years later, in Hurt v. Coyne Cylinder Co., 956 F.2d 1319, 1327 (6th Cir. 1992), the court followed Deviner in holding that expert testimony about safety features mandated in other countries should be excluded. “[F]oreign legal standards have been found excludable [in Deviner], and we will follow that holding.” See alsoSherry v. Massey-Ferguson, Inc., 1997 WL 480893, at *3 (W.D. Mich. June 5, 1997) (agreeing that foreign regulatory matters are irrelevant; fact that defendant used different design abroad could be used to establish alternative design).

[T]his case is governed by domestic law standards concerning which it is undisputed there is no [relevant] government or industry standard or procedure. . . . Evidence of stricter . . . European laws and regulations is likely to confuse and mislead the jury to defendants’ unfair prejudice.

Slip op. at 5. On appeal, the Eighth Circuit tersely affirmed this ruling. Katzenmeier v. Blackpowder Products, Inc., 628 F.3d 948, 950 n.4 (8th Cir. 2010) (“evidence of foreign regulations in a case governed by domestic law has been found excludable because it likely leads to confusion of the jury”).

Drug plaintiffs were not far behind in seeking to muddy the waters between what the FDA did and foreign regulatory activities that differed from the requirements of the FDCA. The issue first came up in an indirect context in birth control pill litigation. A bunch of plaintiffs from the United Kingdom sought to sue in the United States, despite their drugs being subject to an entirely different regulatory framework. The court threw them out because fairness required that a defendant be judged by the standards of the country where the drug in question was approved:

[F]airness to the defendant mandates that defendant’s conduct be judged by the standards of the community affected by its actions. . . . [I]t is manifestly unfair to the defendant, as well as an inappropriate usurpation of a foreign court’s proper authority to decide a matter of local interest, for a court . . . to set a higher standard of care than is required by the government of the country in which the product is sold and used.

This balancing of the overall benefits to be derived from a product’s use with the risk of harm associated with that use is peculiarly suited to a forum of the country in which the product is to be used. Each country has its own legitimate concerns and its own unique needs which must be factored into its process of weighing the drug's merits, and which will tip the balance for it one way or the other.

Id. at 4. AccordDoe v. Hyland Therapeutics Division, 807 F. Supp. 1117, 1129 (S.D.N.Y. 1992) (“[t]he forum whose market consumes the product must make its own determination as to the levels of safety and care required”).

Quite a few years later, in multidistrict litigation, the same court that decided Hurt agreed – although, oddly, without even citing Hurt. Plaintiffs could not use a foreign regulatory decision, this time involving labeling, to create a triable issue about the adequacy of a U.S. drug’s label:

Plaintiffs also allege that the warning label for [the drug’s] European equivalent contains more detailed instructions for the treating physician. Citing no authority, Plaintiffs argue that the difference in instructions creates a triable issue of fact. We disagree. American regulators have different priorities and deal with often more diverse populations than their European counterparts. . . . Plaintiffs have failed to make a showing of inadequacy such that a reasonable jury could find for the nonmoving party.

Those cases pretty well set the tone. In line with Tews, Deviner, Hurt, Katzenmeier, Harrison, and Meridia, foreign regulatory activity has mostly been declared off limits in prescription medical product liability litigation. In In re Vioxx Products Liability Litigation, 448 F. Supp.2d 741 (E.D. La. 2006), the court essentially duplicated the Harrison decision throwing out foreign plaintiffs suing over foreign drugs taken in foreign countries. Foreign drugs are rightly subject only to foreign regulatory schemes:

[T]he governments of [plaintiffs’ home countries] approved and regulated the sale of [the drug] in those countries. . . . [T]rying the Plaintiffs’ claims in the United States risks disrupting the judgments of [those countries’] regulatory bodies. . . . When a regulated industry, such as the pharmaceutical industry, is involved in an action, the country where the injury occurs has a particularly strong interest in the litigation. An American jury would also have no good means of evaluating whether a given foreign label or marketing scheme was adequate.

In Jones v. Lederle Laboratories, 785 F. Supp. 112327 (E.D.N.Y. 1992), aff’d, 982 F.2d 63 (2d Cir. 1992), the court applied the same principle to a design defect case, holding as a matter of law that a differently designed vaccine – approved in Japan but not in the United States – could not, qualify as an “alternative design”:

The case illustrates some of the strengths and weaknesses of the American system for marketing drugs. Requiring strict proof of safety – both to comply with FDA regulations and to avoid tort liability – slows the availability of new products. The result may well be that dangers will be enhanced during the necessarily extended developmental period. . . .

The evidence is essentially uncontested that defendant could not have produced and marketed the safer [Japanese] vaccine that plaintiff's experts say would have avoided [plaintiff’s] injuries. Once this conclusion is reached, there is nothing left to the case. The warnings were adequate. The production was not defective – it was in accordance with the design. No safer alternative design was available. . . . No basis for liability has been shown.

Id. at 1127.

The issue of foreign regulation most frequently comes up – as in Tews, Deviner, and Hurt – in the context of what evidence is relevant and admissible at trial. As we mentioned in our first post on the subject, the court excluded foreign regulatory activity in In re Baycol Products Litigation, 532 F. Supp.2d 1029 (D. Minn. 2007). Allowing experts to rely on inapposite foreign law would only confuse the issues:

[T]he Court finds that allowing the admission of evidence of foreign regulatory actions, in a case that is governed by domestic law, would likely cause jury confusion. Given that notice is not dependent on governmental action, and to avoid jury confusion, the Court finds [expert] testimony concerning foreign regulatory actions must be excluded.

Id. at 1054.

We litigated the issue ourselves – and thus became intimately familiar with it – in the Seroquel litigation. In In re Seroquel Products Liability Litigation, 2009 WL 223140 (Mag. M.D. Fla. Jan. 30, 2009), the magistrate concluded that evidence of foreign regulatory non-approval was inadmissible:

The foreign [drug] labels and the foreign regulatory actions have no relevance to Plaintiffs’ main case. More importantly, whatever minimal relevance the foreign regulatory actions might have is clearly overwhelmed by the likelihood of jury confusion. . . . Plaintiffs’ approach of allowing the evidence of foreign regulations and dispositions as to [the drug] – which the Court views as akin to evidence of foreign legal standards – even with Plaintiffs' proposed limiting instruction, will not alleviate the risk of jury confusion.

Id. at *5-6. The court adopted the magistrate’s conclusion in In re Seroquel Products Liability Litigation, 601 F .Supp.2d 1313 (M.D. Fla. 2009), holding that even if foreign regulatory actions could be relevant to notice, they were prejudicial and inordinately time consuming. Without the necessary “context” the jury might be tempted to “defer to the negative decisions of . . . foreign regulators” concerning the drug. Id. at 1318. But providing the necessary context was, comparatively speaking, a waste of time:

[A]llowing [defendant] to introduce this evidence would result in a series of “mini-trials” regarding the grounds for the decisions and the regulatory schemes of the three foreign countries involved. This would confuse the jury and waste everyone’s time.

The same result was reached in In re Viagra Products Liability Litigation, 658 F. Supp.2d 950 (D. Minn. 2009). Relying on the Baycol decision, the court held that the plaintiffs’ expert’s proposed testimony about foreign regulatory conclusions was both irrelevant and confusing:

The Court finds that any discussion of foreign regulatory actions is irrelevant to the current litigation and should therefore be excluded . . . . Further, the Court finds that to the extent that foreign regulatory information is relevant, its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury.

658 F. Supp.2d at 965-66.

Likewise, in Zammit v. Shire US, Inc., 415 F. Supp. 2d 760 (E.D. Mich. 2006), the court refused to allow an expert to opine on the basis of Canadian regulatory actions. Only the FDA’s actions had any relevance in a case involving an American plaintiff taking an FDA-approved drug:

The evidentiary value of these [Canadian] submissions is quite limited, however. . . . [O]nly the FDA approval process has any legal significance, and it is simply irrelevant whether some other government might have declined to authorize the sale of a drug in some other country, or whether the manufacturer's submission seeking such approval might have been deemed insufficient in some respect.

For the sake of completeness, there are a couple of negative cases that we know of. One is the execrable Gadolinium decision that we previously criticized here. The court didn’t cite a thing – certainly not the Sixth Circuit’s decisions in Meridia and Hurt – in deciding that unspecified “foreign regulatory events” “may be admissible and relied upon by” a plaintiff’s expert, even though the expert was “not qualified to testify as an expert on foreign regulatory law.” In re Gadolinium-Based Contrast Agents Products Liability Litigation, 2010 WL 1796334, at *17 (N.D. Ohio May 4, 2010). The other bad decision is In re Levaquin Products Liability Litigation, 2010 WL 4676973 (D. Minn. Nov. 9, 2010), which allowed evidence of foreign regulatory matters upon finding them too “preliminary” for there to be a risk that the jury would be unduly influenced. Id. at *5. Say what? If they’re so preliminary that a jury would ignore them, then they’re correspondingly less probative, and have no business ever being placed before a jury in the first place.

Thus, to this degree we agree with American exceptionalism in the courts – where prescription medical products are governed by the FDA’s regulatory scheme, that foreign regulators have come to differing, disparate results is not only irrelevant, but prejudicial and confusing as well, at least where the plaintiff is suing over a drug that was prescribed in this country.

Wednesday, June 29, 2011

Since we haven’t heard any of the services mention it, we thought we’d point out that the learned intermediary rule recently got a lengthy endorsement in prescription medical product cases from the Tennessee Supreme Court:

[T]he learned intermediary doctrine. . ., which allows a seller in a failure to warn case to rely on an intermediary to convey warnings about a dangerous product, derives from section 388 of the Restatement (Second) of Torts (1965). Comment n to section 388 provides that when a seller sells a product to an intermediary, the seller may rely on the intermediary to provide warnings to the user of the product if such reliance is reasonable under the circumstances. Although section 388 addresses a supplier's duty to warn under the law of negligence, courts also apply its principles to the duty to warn in strict liability.

Traditionally, the learned intermediary doctrine has been applied to warnings related to prescription drugs. The doctrine constitutes a defense by pharmaceutical manufacturers in cases where a plaintiff has suffered injury from a medication prescribed by a doctor. Physicians, who play a pivotal role in the distribution of prescription drugs, are the intermediaries relied on by manufacturers to give warnings to patients. A majority of jurisdictions, including Tennessee, recognize that a pharmaceutical manufacturer can discharge its duty to warn by providing the physician with adequate warnings of the drug’s risks. In Tennessee, the learned intermediary doctrine is applicable in failure to warn suits where a physician is the intermediary between a defendant pharmaceutical or other medical product manufacturer and an injured patient.

* * * *

The rationale for the doctrine limits its application to the unique circumstances of the medical arena where a physician seeks to find the optimal treatment for a particular patient, as indicated in the following discussion of that rationale as it pertains to prescription drugs:

We cannot quarrel with the general proposition that where prescription drugs are concerned, the manufacturer's duty to warn is limited to an obligation to advise the prescribing physician of any potential dangers that may result from the drug's use. This special standard for prescription drugs is an understandable exception to the Restatement’s general rule that one who markets goods must warn foreseeable ultimate users of dangers inherent in his products. Prescription drugs are likely to be complex medicines, esoteric in formula and varied in effect. As a medical expert, the prescribing physician can take into account the propensities of the drug as well as the susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, and individualized medical judgment bottomed on a knowledge of both patient and palliative.

Anyway Nye makes us happy because it’s one more reaffirmation, from a state high court that the learned intermediary rule is alive and well in the kind of prescription medical product cases that we defend. We can’t say, however, that our feelings are shared by the defendant in Nye.

That’s because Nye did not involve a prescription medical product. Rather, it was an asbestos case. The question that the court ultimately decided in Nye was whether the learned intermediary rule and what we call the “sophisticated purchaser defense” are one in the same. We’re not going to comment on that, because we don’t want to say anything that could possibly get quoted back at us in a one of our own cases not involving drugs or devices. The reasons why some courts don’t apply the learned intermediary rule to all arguably “learned” intermediaries are set out at length in Nye. For the reasons why other courts disagree, we recommend reading Alm v. Aluminum Co. of America, 717 S.W.2d 588, 591-92 (Tex. 1986), or one of the cases cited in Alm.

Tuesday, June 28, 2011

Several years ago (just writing that makes us feel tired) we put up a mournful post entitled In The Deserts Of New Mexico, in which we expressed our disappointment that a federal judge – any federal judge – would ignore no fewer than four intermediate appellate decisions from the New Mexico Court of Appeals and predict that New Mexico law would not adopt the learned intermediary rule.

Well, there was a change in judges in Rimbert, and that case was promptly bounced on causation grounds, as we reported here. So the learned intermediary issue fell by the wayside in Rimbert, leaving that disenchanting decision on the books.

Today, we’re pleased to report, courtesy of our friends at Sidley, that a little rain has fallen in the New Mexican desert. In the Trasylol litigation, the MDL court was faced with a New Mexico plaintiff (or at least a New Mexico procedure undertaken by a New Mexico physician) where the evidence was undisputed that the doctor – a tertiary care heart surgeon – would have used Trasylol regardless of any warning and, given the serious condition of the patient, would not have provided any different warnings to the patient. To make a long story short, the patient was dying of heart disease and was airlifted to an Albuquerque hospital where a long open-heart procedure involving lots of drugs and medical devices was performed.

The more learned the intermediary, the more likely the rule is to come in handy.

So once again summary judgment came down to the learned intermediary rule in a New Mexico case, because there was no way any different warning to this doctor would have affected the outcome. The court thought so too. The MDL judge in In re Trasylol Products Liability Litigation, No. 08-cv-80399, slip op. (S.D. Fla. June 23, 2011), without hesitation predicted that New Mexico law was as stated in the multiple Court of Appeals decisions – and not Rimbert. Slip op. at 8-9 & n.11.

Even better, the court did a little Erie research and came up with a Supreme Court decision that directly addressed what courts should do when a state’s high court hasn’t decided an issue but the state’s intermediate appellate court has. Trasylol, slip op. at 8 n.11 (citing Goodling v. Wilson, 405 U.S. 518 (1972)). Absent a “conflicting” supreme court decision, federal courts should follow the state appellate court consensus. Id.

That’s useful because, according to our learned intermediary 50-state survey, several other states are essentially in the same position vis-à-vis the learned intermediary rule as New Mexico – Arizona, Colorado, Louisiana, and (for the time being, anyway) Texas.

In the last two Supreme Court cases we have been following this term, the Court took a critical look at the stream of commerce basis for personal jurisdiction and, as we hoped (and expected), ruled in defendants favor in both.We discussed both lower court decisions in our prior post Personal Jurisdiction—A Primer which criticizes those decisions as extreme expansions of corporate personal jurisdiction which potentially could have resulted in product manufacturers being sued anywhere over anything.Fortunately, the Supreme Court also thought both cases went too far – although it appears to have been a closer call in the context of specific jurisdiction.

Goodyear – Stream of Commerce Doesn’t Create General Jurisdiction

In a unanimous decision authored by Justice Ginsburg (who, by the way, authored the dissent in Nicastro), the Court found that the stream of commerce theory was an “inadequate basis for the exercise of general jurisdiction” and limited its application to specific jurisdiction.Goodyear v. Brown, No. 10-76, slip op. (U.S. June 27, 2011).While our earlier post also has a more detailed discussion of specific v. general jurisdiction, here is how the Court explained the distinction in Goodyear.General jurisdiction allows a court to hear any claims in any matter about anything against a defendant because the defendant’s “affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forumState.Slip op. at 2.

Specific jurisdiction, on the other hand, depends on an affiliatio[n] between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.

Id. (citations and quotation marks omitted – as usual).

At issue in Goodyear was whether plaintiffs, residents of North Carolina, could sue foreign tire manufacturers in North Carolina state court alleging that the tires defendants manufactured abroad were defective and the cause of a fatal bus accident in France. Id. at 3-4. The tires at issue weren’t manufactured in the United States.They weren’t sold to anyone in the United States.The accident didn’t occur in the United States.You can understand why a finding of personal jurisdiction in this case worried us.

Everyone was in agreement that the court couldn’t exercise specific personal jurisdiction because none of the events at issue took place in North Carolina.Arguing in favor of a broad interpretation of the stream of commerce theory, plaintiffs urged that that North Carolina could exercise general jurisdiction because “[s]ome of the tires made abroad by [the] foreign [defendants] . . .had reached North Carolina through the stream of commerce.”Id.As we’ve previously calculated, “some” was approximately one-twentieth of one percent of total product sales.

But, the Court did not need to analyze too closely the scope or breadth of the stream of commerce theory, instead deciding to limit its application to instances of specific jurisdiction only:

The stream-of-commerce metaphor has been invoked frequently in lower court decisions permitting jurisdiction in products liability cases in which the product has traveled through an extensive chain of distribution before reaching the ultimate consumer. Typically, in such cases, a nonresident defendant, acting outside the forum, places in the stream of commerce a product that ultimately causes harm inside the forum.

. . .

The North Carolina court’s stream-of-commerce analysis elided the essential difference between case-specific and all-purpose (general) jurisdiction.Flow of a manufacturer’s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction. But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant.

Slip op. at 9-11 (citations and quotation marks omitted).So the takeaway is – it’s simply impossible for the “stream of commerce” to create “general” jurisdiction.It’s like trying to stick butter up….Well, we’ll leave the rest of that analogy to those that know it, but bottom line, it can’t be done.

A unanimous decision in this case wasn’t that surprising given the extremely attenuated connections between the defendants and the forum.But the Court faced the more difficult question in the second stream of commerce case it decided yesterday – how to reconcile stream of commerce jurisdiction in a global marketplace.

Nicastro – Actions Win Out Over Expectations

In J. McIntyre Machinery, Ltd. v. Nicastro, No. 09-1343, slip op. (June 27, 2011), the Court was faced with the application of stream of commerce jurisdiction based on one of competing opinions authored by Justices O’Connor and Brennan in Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102 (1987).(Asahi is also discussed in greater detail in our prior post).While the Nicastro Court decided 6-3 to reverse the New Jersey Supreme Court’s decision allowing the exercise of jurisdiction over a foreign defendant, the lead opinion, authored by Justice Kennedy and intended “to provide greater clarity,” slip op. at 4, on the 4-4 split in Asahi, was joined by only three other justices [Chief Justice Roberts and Justices Scalia and Thomas].Justices Breyer and Alito concurred in the judgment but not the reasoning of the plurality.So, while we wholeheartedly agree with the decision and are strongly encouraged by the plurality’s reinvigoration of the purposeful conduct test, Justice Kennedy wasn’t able to achieve greater “clarity.”One needs a majority for that.

Let’s start with the facts.Plaintiff was a scrap metal worker from New Jersey who injured his hand while using a machine manufactured in England by the defendant, an English company.Plaintiff brought his products liability action in state court in New Jersey – where the injury occurred.Slip op. at 2-3.We already have a stronger connection than in Goodyear, but still a pretty lousy one.

Plaintiff relied on three facts to support the assertion of jurisdiction over the defendant:

Defendant utilized an independent distributor in Ohio to sell its product in the United States;

Defendant attended annual conventions in the United States – but not New Jersey -- to advertise its products; and

Between one and four of defendant’s machines ended up in New Jersey.

Id. at 3.The New Jersey Supreme Court determined that jurisdiction was proper

because the injury occurred in New Jersey; because petitioner knew or reasonably should have known that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the fifty states; and because petitioner failed to take some reasonable step to prevent the distribution of its products in this State.

Id. at 3-4.In other words, the New Jersey Supreme Court took it on itself simply to abolish state boundaries (and thus our federal system) in pursuit of expanded personal jurisdiction.

The Supreme Court disagreed, as we thought it would, and the plurality found that the New Jersey court had imprudently aligned itself with Justice Brennan’s foreseeability test from Asahi.Id. at 7 (Justice Brennan’s approach “discarded the central concept of sovereign authority in favor of considerations of fairness and foreseeability.”).Finding “greater clarity” in Justice O’Connor’s opinion, Justice Kennedy writes:

But Justice Brennan’s concurrence, advocating a rule based on general notions of fairness and foreseeability, is inconsistent with the premises of lawful judicial power. This Court’s precedents make clear that it is the defendant’s actions, not his expectations, that empower a State’s courts to subject him to judgment.

Id. at 8.Continuing its support of a “purposeful conduct” test, the plurality states that personal jurisdiction requires a case-by-case analysis:

The question is whether a defendant has followed a course of conduct directed at the society or economy existing within the jurisdiction of a given sovereign, so that the sovereign has the power to subject the defendant to judgment concerning that conduct.

Id. at 9.

So, which sovereign are we talking about – the United States or a particular state?With a domestic defendant, jurisdiction is attainable in its home state.But, if a foreign defendant directs his “conduct” to the entire United States, the plurality admits that conceivably “a defendant may in principle be subject to the jurisdiction of the courts of the United States but not of any particular State.”Id.In fact, applying the purposeful conduct test to the facts of Nicastro, the plurality found that while the defendant had directed its marketing to the United States, it did not engage in purposeful conduct directed to New Jersey such that a New Jersey state court could properly exercise jurisdiction over the case. Id. at 10-11.

The plurality went on to state that this should be a rare occurrence as “foreign corporations will often target or concentrate on particular States, subjecting them to specific jurisdiction in those forums.”Id. at 9. The dissent seems less convinced that state-specific marketing campaigns are the wave of the future.Dissenting slip op. at 10, 13-17.Admittedly, at least with respect to pharmaceuticals and medical devices, we agree.If our clients manufactured combines maybe Iowa-specific ads would be a good strategy.But typically prescription drugs know no geographical boundaries and based on Nicastro, our foreign clients US-based marketing campaigns are insufficient, in and of themselves, to establish personal jurisdiction.

Just a quick note on the concurring opinion.Essentially, Justices Breyer and Alito believed the plurality need not have gone so far as “to announce a rule of broad applicability”, concurring slip op. at 1, where the same decision could have been reached using either of the dueling Asahi opinions.Under Justice O’Connor’s notion of “requiring something more” than simply placing the product in the stream of commerce or Justice Brennan’s concept that the sale need be part of the “regular and anticipated flow” of commerce into the State:

a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place.

Id. at 2-3.So, under either test – “regular flow” or “something more” – the contacts or conduct of the defendant in Nicastro aren’t enough.Wanting to leave the discussion open for another day, Justice Breyer acknowledged that “contemporary commercial circumstances” – such as selling goods through an intermediary via the web – might raise issues that require a hard look at existing personal jurisdiction rules, “but those are totally absent in this case.” Id. at 4, 7.

Finally, what about the domestic implications if New Jersey’s interpretation of stream of commerce jurisdiction had prevailed?Both the plurality and concurring opinions recognized that

A rule like the New Jersey Supreme Court’s would permit every State to assert jurisdiction in a products-liability suit against any domestic manufacturer who sells its products (made anywhere in the United States) to a national distributor, no matter how large or small the manufacturer, no matter how distant the forum, and no matter how few the number of items that end up in the particular forum at issue.

Id. at 5; see alsoNicastro, plurality opinion, slip op. at 10.Given the size of the U.S. market for drugs and medical devices, it is unlikely this will have much bearing on our domestic clients, but a worthy point nonetheless.

Monday, June 27, 2011

When we began practicing law, we worked for a partner who believed in scorched-earth research. Every time we'd go to his office with our findings, he'd begin by asking what we had looked at: "Did you look at X? Did you look at Y? Did you look at Z?" As soon as we admitted we hadn't looked at something (it was all too often X) he bellowed and chased us out of his office. One thing he always told us to look at were law review articles. But he insisted that we look only at the first half of an article, where the problem was laid out and cases were discussed. He said we needn't bother with the last part, where some smug law student arrived at a 'solution' that was invariably at odds with reality and common sense.

We're afraid that we recently acted the part of smug law student when we authored a half-useful piece called "Anger Management." In it, we argued that jury anger, even when created by an obnoxious plaintiff lawyer, was harmful to a corporate defendant. A jury that is sympathetic to a plaintiff is tough, but you can still talk to them. If a jury is mad at you, they won't even listen.

Got that so far? Are we good? (Not with all of you. One of our readers is plaintiff attorney Ron Miller, who challenged our thesis in his blog. There's even an illustration next to Ron's post. At first we thought it was a reproduction of Munch's "Scream," but now we're convinced that it's a portrait of Bexis after first reading Levine. Ron Miller is a smart guy so we have to respect his assertion that no plaintiff lawyer actually wants to get a jury ticked off at him. In fact, we'd be the first to admit that Ron's rejoinder was well-reasoned and well-written. It was also brutal. We cried ourselves to sleep that night. He accused us of being sycophantic with our clients and clueless in our analysis. We deny being clueless. He's probably right about the other part.)

Anyway, we went on to offer suggestions for diffusing the anger in the courtroom, including talking to the jurors about what standard the company was required to meet and how the company in fact met that standard. Here was our proposed solution: "The sad truth is that jurors tend to hold companies to a higher standard. Why not embrace that, and show that the defendant even exceeded that standard?"

Remember how in our original post we confessed to pilfering from a clever in-house lawyer the idea that jury anger, no matter the source, was bad for defendants? That same in-house lawyer (who is, by the way, brilliant and exceedingly well-dressed) recently told us that she thinks our suggestion is interesting, but potentially fraught with peril in practice. First of all, how often does one have the pleasure of representing a company that exceeded some standard it was required to meet? And even if a company exceeds one standard it is held to, it might be barely meeting other standards equally relevant to the issue at hand. Or maybe the company started exceeding standards only a year ago, and was simply meeting them for the previous five years that the product was on the market. There is a danger that even suggesting to a jury that a company did more than it was required to on some issues validates the notion that many of the jurors may have that the regulations currently in place are not enough, that manufacturers can and should do more, and that it’s up to the jury to superimpose their judgment of what the right regulations should be onto this landscape via a stratospheric plaintiff verdict.

Is this scenario likely? We do vaguely recall wrongful termination cases where companies got hosed for failing to live up to their own higher standards. Or are self-imposed standards more like Good Samaritan cases? We'd like to think that if plaintiffs try to assert that the voluntary standard creates an automatic legal duty, like negligence per se, plaintiffs will lose, because these self-imposed standards have no force of law. Then again, maybe plaintiffs can phrase their claim in terms of a voluntarily assumed duty under Restatement §323/324A. In any event, the concern isn't so much about the legal issue of cognizable claim as it is about jury atmospherics. How comfortable are you trying to predict how that will play out?

And it gets worse -- which is to say that there's more annoying reality out there that we hadn't considered. In the brave new world of innovator and generic (or multiple generics) sitting as co-defendants at the same table, it’s a dangerous practice to engage in the functional equivalent of what happens on many nights at the dinner table where Drug and Device Law Child Number 1 gets yelled at for not eating her dinner or playing with her food and Drug and Device Child Number 2 looks lovingly into his parents’ eyes, smiles sweetly and says, "I’m being a good boy, aren’t I?" Want to guess how well that goes over with his sister?

According to our in-house friend (did we mention how gosh-darned smart and eloquent she is?) the goal has got to be to show the jury that the defendant did everything it was supposed to do and that’s okay. Compliance is enough. As we've written many times in the past (for example, here, here, and here), compliance with FDA regulations can be a complete defense. In some jurisdictions, compliance can at least help fend off punitive damages.

"Mere" compliance might not always be the easiest concept to sell to a jury. Too many jurors think corporations are omniscient and omnipotent. The concept might be even harder to sell to most corporate witnesses because, generally, those people think that their company is the best and they personally have made a career out of doing more and going beyond, so it’s their natural inclination to embrace those concepts in front of the jury. But once you show a jury that more could be done or in fact has been done in some situations, you have given the jury permission to set a new standard of behavior. Compliance with that new standard is bound to be imperfect and your client might even be -- dare we say it? -- punished. That punishment is likely to be somewhat worse than what Drug and Device Child Number 1 gets for flinging lima beans under the table.

Let's go back to that partner-ogre we mentioned in the first paragraph. Another thing he used to say to (scream at) us was that "It's all in the drafting!" That is, there's probably a way to say what you want to say and make it work. So despite our in-house friend's concerns (and let's put our cards on the table right here and right now: she is always, always right), we still think there are ways we can take advantage of those times when a corporation goes the extra mile to assure patient safety. Maybe we can simply lay out the facts and let the jurors conclude that the company should get credit for doing more than was strictly called for by laws or regulations. Then the jurors, rather than seek to argue against our position, would arrive at the position themselves and come to own it.

Or have we yet again proposed a 'solution' that is pure bunk?. Don't be shy to tell us. You don't have to be a client or plaintiff lawyer or corner office codger to call us crazy.

Friday, June 24, 2011

As we mentioned yesterday, due to Dechert’s involvement in litigation concerning the drug at issue in Pliva, Inc. v. Mensing, No. 09–993, slip op. (U.S. June 23, 2011), we can’t comment on the case.But some other people have. Here’s a wrap up of what other legal types (not the press) have said.

By far the most substantive post we found was from the Law Profs, although (unfortunately but predictably) they support the side of unlimited litigation (law students need jobs). With their nose for the arcane, the Profs focused on the court’s “non obstante” discussion – the one non-majority (it was 4-4) section of the Mensing opinion.

Thursday, June 23, 2011

The Court decided 5-4 in favor of generic preemption today in Pliva, Inc. v. Mensing, No. 09–993, slip op. (U.S. June 23, 2011).We’d like to talk about Mensing, but it’s a metoclopramide case, and consistent with blog policy we don't comment on cases in which Dechert is involved – so we can’t, at least now.Sorry, our lips are sealed.

Sorrell – Pharmaceutical Detailing Is First Amendment Protected

In the second interesting opinion of the day, the Court decided Sorrell v. IMS Health, Inc., No. 10-779, slip op. (U.S. June 23, 2011). Sorrell involved a state statute intended to interfere with pharmaceutical detailing by precluding detailing companies from obtaining access to information (available from pharmacies) about which doctors prescribe what drugs, or even if they got it, from using that information without the prior consent of each and every individual physician. Slip op. at 2-4. On top of that, the statute provided for state-financed “counter-detailing” – pushing cheaper, often generic, competing drugs. Id. at 4-5. “Data miners,” who gather and sell this information, and pharmaceutical companies challenged the statute as a violation of the First Amendment.

The 6-3 opinion in Sorrell is a strong reiteration of First Amendment principles, particularly in the commercial speech arena. Justice Kennedy, the "swing justice" of the current Court, wrote the opinion. We are aware that, at various times, several of the justices have expressed disagreement with the commercial speech analysis of Central Hudson Gas & Electric Corp. v. Public Servicew Comm’n, 447 U.S. 557 (1980). Interestingly, Sorrell doesn't strictly adhere to the Central Hudson framework, which will no doubt touch off considerable academic speculation as to that case's continuing viability. We'll leave that to the First Amendment scholars to chew on. We're more interested in the prescription drug implications of the case.

In that vein, the point we’re most interested we find right there in the majority opinion’s first paragraph: “Speech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment.” Sorrell, slip op. at 1.

Initially, the Court found an explicit content-based discrimination against speech, since the statute prohibited use of pharmacy prescriber information only in pharmaceutical detailing. Slip op. at 6-7.

The statute thus disfavors marketing, that is, speech with a particular content. More than that, the statute disfavors specific speakers, namely pharmaceutical manufacturers.

Id. at 8. That’s the first First Amendment no-no, opening the door to heightened judicial scrutiny. Id. at 7-8.

The Court had no trouble walking through that door. The state put a heavy thumb on the free speech scale, since the statute alloews it to distribute the same information that it denied pharmaceutical marketers to the statute’s contemplated “counter detailers.” Slip op. at 8. “Vermont’s law thus has the effect of preventing detailers – and only detailers – from communicating with physicians in an effective and informative manner.” Id. at 9. Thus the statute “goes even beyond mere content discrimination, to actual viewpoint discrimination.” Id. That’s an even bigger First Amendment no-no, mandating heightened scrutiny:

Lawmakers may no more silence unwanted speech by burdening its utterance than by censoring its content. The First Amendment requires heightened scrutiny whenever the government creates a regulation of speech because of disagreement with the message it conveys.

Id. at 10 (citations and quotation marks omitted). And “commercial speech is no exception.” Id. at 10-11.

The Court leveled the state’s arguments. It wasn’t an access to government-controlled information case. To the contrary, the information that the state was interfering with was already in the private hands of either the pharmacists or the drug manufacturers, and it was their use of information in their own possession that was being restricted. Slip op. at 12-14. Nor was the information merely a “commodity” like “beef jerky.” Indeed, in light of what the statute in fact did, the majority had little patience with that argument:

The State has imposed content- and speaker-based restrictions on the availability and use of prescriber-identifying information. So long as they do not engage in marketing, many speakers can obtain and use the information. But detailers cannot. Vermont’s statute could be compared with a law prohibiting trade magazines from purchasing or using ink.

Id. at 15.

The commercial nature of the speech did not insulate the content- and speaker-based prohibitions of the statute from the First Amendment. “[T]he outcome is the same whether a special commercial speech inquiry or a stricter form of judicial scrutiny is applied.” Slip op. at 16. The Court thus left open the possibility (it did not decide the question) that the information in question may be entitled to more than the usual commercial speech protection. Id.

Even under the lesser scrutiny given restrictions on commercial speech, the statute’s impositions upon pharmaceutical detailing failed.

The statute’s purported justifications did not support the restrictions on pharmaceutical detailing.

First, the statute wasn’t a legitimate effort to protect physician privacy. Only one use of the supposedly private information was proscribed. The statute did not prohibit disclosure of sensitive information in “only a few narrow and well-justified circumstances,” but rather “made prescriber-identifying information available to an almost limitless audience” – essentially everybody in the world except pharmaceutical detailers. Slip op. at 18. Even the physician consent feature operated only to allow speech that the “state opposes,” so the privacy being offered (assuming there was any) was Big Brother privacy, “only on terms favorable to the speech the State prefers.” Id. Thus, “limited range of available privacy options instead reflects the State’s impermissible purpose to burden disfavored speech.” Id. at 19.

Scratch that flattop.

Second, that some doctors were annoyed by pharmaceutical detailing isn't a justification for the discriminatory exercise of state power. Having to “endure” annoying speech “is a necessary cost of freedom.” Slip op. at 20. We could say the same about attorney advertising, or beer commercials. Everybody - our clients, not just our opponents - has a constitutional right to annoying commercial speech.

We can turn off the TV. In their offices, like in our homes, physicians can simply tell annoying speakers to go away:

Physicians can, and often do, simply decline to meet with detailers, including detailers who use prescriber-identifying information. Doctors who wish to forgo detailing altogether are free to give “No Solicitation” or “No Detailing” instructions to their office managers or to receptionists at their places of work.

Id.

That doctors might actually act on the information provided by detailing, even if (the state would say) they do so wrongly, can’t justify the restriction on truthful pharmaceutical-related speech:

The more benign and, many would say, beneficial speech of pharmaceutical marketing is also entitled to the protection of the First Amendment. If pharmaceutical marketing affects treatment decisions, it does so because doctors find it persuasive. . . . [T]he fear that speech might persuade provides no lawful basis for quieting it.

Id. at 21.

Scratch another flattop.

Third, the statute couldn’t be justified as a way for the state to save money by inducing physicians to prescribe cheaper drugs. Speech cannot be inhibited for this reason:

This reasoning is incompatible with the First Amendment. . . . [T]he State may not seek to remove a popular but disfavored product from the marketplace by prohibiting truthful, non-misleading advertisements that contain impressive endorsements or catchy jingles. That the State finds expression too persuasive does not permit it to quiet the speech or to burden its messengers.

Slip op. at 22 (emphasis added). While there are “divergent views regarding detailing and the prescription of brand-name drugs,” “[u]nder the Constitution, resolution of that debate must result from free and uninhibited speech.” Id. “The choice between the dangers of suppressing information, and the dangers of its misuse if it is freely available is one that the First Amendment makes for us.” Id.

Scratch yet another flattop. It's looking like a First Amendment Battle of Midway out there.

Pharmaceutical detailers have a constitutional right to seek to persuade doctors to use their products, even if the government doesn’t like the result:

The State may not burden the speech of others in order to tilt public debate in a preferred direction. The commercial marketplace, like other spheres of our social and cultural life, provides a forum where ideas and information flourish. . . . [T]he general rule is that the speaker and the audience, not the government, assess the value of the information presented.

Id. at 23-24. The speech isn’t “false and misleading,” thus “[t]he State’s interest in burdening the speech of detailers instead turns on nothing more than a difference of opinion.” Id. at 24 (citing, among other cases, Thompson v. Western States Medical Center, 535 U.S. 35, 376 (2002)). Midway? Maybe the better analogy would be to the Marianas Turkey Shoot.

FDA, are you listening?

The dissent was. It observes – and we agree – that “the same First Amendment standards . . . would apply to similar regulatory actions taken by . . . the Federal Government acting, for example, through Food and Drug Administration (FDA) regulation.” Dissenting slip op. at 6; seeid. at 10-11 (discussing off-label use).

Wednesday, June 22, 2011

It has been several months since we last posted about Medicare and our client’s new reporting requirements.While we are sure you have enjoyed the reprieve, Medicare remains one of those boring things you need to know.However, unlike some other boring things you probably show know about – like how to change a tire for example – Medicare is one that our clients can’t avoid (and yes, tire changing can be avoided in innumerable ways, and this writer has used them all!).

So, it is with interest, if not complete enthusiasm (or authority), that we bring you a recent decision by the Eastern District of Pennsylvania from the Avandia MDL – Humana v. GlaxoSmithKline, No. 10-673, slip op. (E.D. Pa. Jun. 13, 2011) – the primary result of which is a finding that while the government created its own federal, private cause of action for reimbursement of Medicare expenses, it did not expressly or impliedly extend that same recourse to private Medicare providers.

Forgive us, but a bit of explanation of the Medicare system is required.We are all familiar with the Medicare Secondary Payer Act (“MSP Act”), 42 U.S.C. §1395y(b), which provides that settling-product liability defendants (considered primary insurers) must reimburse the government for Medicare expenses it incurred related to the alleged injury.We also know that if a settling-product liability defendant fails to reimburse the government, the government has a private cause of action against the settling defendant for double damages.A pretty big stick in the mass tort arena.

What we may not take the time to appreciate is that not all Medicare is provided directly by the government.Most people eligible for Medicare can elect, under Medicare Part C, to receive their Medicare insurance from private insurers known as Medicare Advantage organizations (“MAOs”).MAOs are governed by the Medicare Advantage (“MA”) statute, 42 U.S.C. §1395w-21(a)(1), and like the government are afforded secondary payer status (eligible for reimbursement from primary insurers including product liability defendants).Humana, slip op. at 5-7.

If they are both secondary payers entitled to reimbursement, what’s the issue?Well, that was Humana’s argument – we are the same as the government, a provider of Medicare, and therefore we can sue a settling-product liability defendant under the MSP Act for failing to reimburse us.But the court didn’t agree.

This court and others who have looked at the issue have found that while the MA statute references the MSP Act, it does so only to explain “when a Medicare provider is a secondary insurer, and does not incorporate the remedies of the MSP Act.”Id. at 7 (emphasis added).In other words, if the government is the Medicare provider, it can sue a settling-product liability defendant for failure to reimburse and potentially recover double damages in a federal private cause of action under the MSP Act.If Medicare coverage is provided by a private insurer, no such cause of action exists and there is no right to double damages.MAO’s are not without recourse, they are simply limited to “enforce[ing] their rights as secondary payers under the common law of contract.”Id. at 13.(Per the MA statute, an MAO can include in its insurance contract with enrollees a provision that makes the MAO a secondary insurer and therefore, the MAO “may seek reimbursement from the primary insurer.” Id. at 6.).

So, we laud this decision as protecting our clients from potential suits for double damages; but we also question its impact and implication as we doubt our clients typically gather information on whether plaintiffs are Part A, Part B or Part C Medicare recipients.Maybe the lesson is they should – and they might have to.

To bring it back to the reporting requirements that our clients are all anxiously waiting to go into effect, Humana’s complaint also had a claim for equitable relief asking the court to require defendant to identify “every MAO-insured individual with whom [defendant] has settled.”Id. at 13.As we suspected, the defendant’s response was that it doesn’t collect insurance coverage information on settling plaintiffs.Id.Humana argued that the new MSP Act reporting requirements will apply to MAO enrollees as well as government-Medicare recipients.The court declined to resolve the dispute as not ripe because the reporting provision is not yet in effect and the MAO remains in the better position to know who its enrollees are.But with the reporting requirements about to go into effect (presumably), this may be another area where the government has afforded itself a protection it has not extended to the private insurance companies.Whatever the eventual ruling on that issue, the bottom line is Medicare is still boring, still complicated, still (and increasingly) burdensome to our clients, and still unavoidable.

Tuesday, June 21, 2011

The Supreme Court decided the climate change case, American Electric Power Co. v. Connecticut, No. 10–174, slip op. (U.S. June 20, 2011), and the class action case, Wal-Mart Stores, Inc. v. Dukes, No. 10–277, slip op. (U.S. June 20, 2011), yesterday. We can’t hope to compete with the deluge of general comment on these two behemoths (nor would we be particularly competent to do so), so we’ll focus on what, if anything, we’ve found in these decisions that’s relevant to prescription medical product liability litigation.

Wal-Mart v. Dukes

First Dukes – initially because it was released a few minutes before AEP, and ultimately because there’s more there there (apologies to Oakland) for us.

As everyone who cares to know already knows, Dukes was (before yesterday) a gigantic employment discrimination case. As a substantive matter, there’s not a whole lot of overlap between Dukes and what we do here. Everybody knew that the Dukes class action was so huge and polyglot that its certification had a target on its back. Indeed, not a single justice was willing to uphold the Ninth Circuit’s decision that there was a certifiable class. But while part of Dukes (Part III, to be exact) was unanimous, another part (Part II) is only 5-4, and the Part II split was the usual “liberal/conservative” one with Kennedy siding with the Court’s right wing.

Interestingly, the 5-4 part of the opinion was decided on commonality grounds. Previously, that prong of Rule 23(a) had been sort of a “gimme” in class action litigation. Most courts had held commonality satisfied if any plausible “common” issue existed, no matter how many individualized issues existed nor how weighty they were.

Well, no longer – and this is a ruling applicable to all class actions, including those involving prescription medical products. Commonality now has some teeth. If you don’t believe us, check out the dissent. SeeDukes, dissenting slip op. at 8 (the majority “elevates the (a)(2) inquiry so that it is no longer easily satisfied”). Right on. Simply “reciting” a few common questions “is not sufficient to obtain class certification.” Dukes, opinion of the Court, slip op. at 9.

Commonality requires the plaintiff to demonstrate that the class members have suffered the same injury. This does not mean merely that they have all suffered a violation of the same provision of law. . . . Their claims must depend upon a common contention. . . . That common contention, moreover, must be of such a nature that it is capable of classwide resolution – which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

Id. (citation and quotation marks omitted – both here and in the quotes that follow) (emphasis added). In other words, commonality now requires that all the class claims have a “central” common issue upon which every class member's claim rises or falls.

This sounds like an essential element test, but to what extent? A claim could have more than one essential element, some common some not. That's something that happens all the time in litigation. But the absence of either would be enough to tank the claim. Knock out any essential element of a cause of action, and the whole claim falls, regardless of the other elements (that’s why they’re “essential”). So, under Dukes, how "central" is a common issue, if the same cause of action also contains an individualized element that by itself could defeat the claims? If any essential element of a claim is individualized, do other “common” elements satisfy the "in one stroke” test? We can't say, but it's something we'll be litigating.

And that’s just commonality, formerly the easy one.

As a matter of personal prerogative, we have to point out that, as support for this change in the law – and it’s as much of an emphasis shift as TwIqbal was for Rule 8 – the Court relies upon the work or our departed friend, Professor Richard Nagareda, whom we eulogized here. His work truly lives on.

There’s more good stuff. The old Eisen “don’t look at the merits” prohibition – already in tatters – is now definitively interred:

[C]ertification is proper only if the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied. Frequently that rigorous analysis will entail some overlap with the merits of the plaintiff’s underlying claim. That cannot be helped.

Dukes, slip op. at 10. Thus, in our neck of the woods, as in all others, plaintiffs “must affirmatively demonstrate” entitlement to certification. Id. Just so nobody misses the point, the Court drops a footnote at the end of that paragraph, which explicitly buries the prior “mistaken” view of Eisen. Id. at n. 6 (characterizing the former view of Eisen as “purest dictum” and “contradicted by our other cases”).

So as to Eisen, it’s the end of an error. It was a long time coming; may it be a long time gone.

The fundamental factual problem for the plaintiffs in Dukes was the defendant’s lack of centralized employment decision-making. That process atomized the class, as it’s pretty difficult to assert credibly that disuniformity can be uniform throughout a class. Hence the Court’s statement:

Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members’ claims for relief will produce a common answer.

We’re not employment lawyers on this blog, but we see a definite analogy to the individualized role of learned intermediary prescribers in prescription medical product cases. Just as in Dukes – and indeed, a fortiori, since every doctor’s prescription is an exercise in patient-specific medical judgment – there is no “glue” holding together any significant number of separate drug/device prescriptions.

We always viewed all those marketing-based class actions as phony. In light of Dukes, we think the Supreme Court would, too.

Also of great interest is the Court’s treatment of the purported “statistical proof” of discrimination – some sort of regression analyses that allegedly identified regional differences in the kind of stuff relevant to employment discrimination. The Court essentially holds that this type of attenuated statistical modeling doesn’t prove squat about each and every member of the class, as required by the Court’s beefed up commonality analysis:

There is another, more fundamental, respect in which respondents’ statistical proof fails. Even if it established . . . [a] pattern that differs from the nationwide figures or the regional figures . . ., that would still not demonstrate that commonality of issue exists. . . . [R]espondents have identified no specific . . . practice – much less one that ties all their 1.5 million claims together. Merely showing that [defendant’s] policy . . . has produced an overall . . . disparity does not suffice.

Dukes, slip op. at 16-17. We deliberately stripped this quote of all its Title VII-related employment specifics to see how the Court’s holding would look as a general statement of class action law. We like it. It looks like a pretty broad indictment of attempts to prove commonality (and probably other Rule 23 elements, too) by means of bare statistical associations.

This aspect of Dukes looks like an application, at the Supreme Court level, of what Judge Weinstein called (not altogether fondly) the “individualized proof rule.” SeeIn re Zyprexa Products Liability Litigation, 671 F. Supp.2d 397, 434-48 (E.D.N.Y. 2009). If our view of Dukes proves accurate, then there’s not much of a future for those experts, whom we all know and love, who peddle similar statistical analyses in support of marketing-based class actions in drug/device cases.

Finally, one more goodie out of Part II. Another currently raging class action battle is whether Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), applies to class certifications. While the Court did not explicitly decide that question in Dukes – it gave a pretty strong hint: “The District Court concluded that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. We doubt that is so. . . .” Dukes, slip op. at 14.

We can use that in future battles. Praise the Court and pass the ammunition.

We reiterate: All of the above analysis is of the Rule 23(a) commonality factor. That’s a factor that must be met in any proposed class action of any sort under Rule 23. In these ways Dukes is relevant to every class action asserted against a manufacturer of prescription medical products.

Part III of the Dukes opinion – the unanimous part (Part I is simply a factual/procedural history) – is narrower because it only concerns when an “injunctive” class can also seek forms of monetary relief. As to Rule 23(b)(2), even the Court’s liberal wing could not stomach the Dukes certification. The Court did not reach the question whether monetary relief is “ever” allowed under Rule 23(b)(2), but decided the case on back pay awards being a prohibited form of “individualized” relief.

Professor Nagareda must be smiling down upon us today, because again the Court relies on his writings:

The key to the (b)(2) class is the indivisible nature of the injunctive or declaratory remedy warranted – the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them.

Dukes, slip op. at 20 (quoting one of his many articles on the subject). In short, individualized and class-wide relief cannot be joined together in a Rule (b)(2) action. Id. at 21. Rule (b)(2) class members simply can’t seek “an individualized award of monetary damages.” Id. at 20-21. It doesn’t matter whether the monetary claims “predominate” or not – if they’re individualized, Rule 23(b)(2), and very likely Due Process itself, cannot accommodate them. Id. at 23-25. Whether or not some unspecified form of “incidential” monetary relief would be allowable in such classes, whenever such relief is “individualized,” Rule 23(b)(2) is unavailable. Id. at 26.

Right about there, we were looking for another citation to the ALI’s Principles of Aggregate Litigation. We didn’t see it.

We think that the Court’s holdings about Rule 23(b)(2) have implications for medical monitoring class actions. In most, if not all such classes, entitlement to relief varies greatly depending upon how much, how long, and how often an individual was exposed to a particular substance (which is sometimes alleged to be a drug – only rarely a medical device) claimed to threaten future harm. Combined with the Court’s broad criticism of statistical proof of injury, we would expect courts to take a harder look at medical monitoring class actions under Rule (b)(2) after Dukes.

Another thing that we’ve occasionally seen in drug/device class actions is an attempt by the plaintiffs to use a class action to extrapolate the results of a few plaintiffs’ cases to everybody else in the class. That’s usually called a “Castano” issue (at least by our side) – so named after a 1990s cigarette case out of the Fifth Circuit that's been the most well-reasoned case rejecting class-action based extrapolation.

Now we can call that a Dukes problem – except that we shouldn’t have to worry about it much at all anymore. In the last part of Part II, that’s the unanimous part, the Court looked at the concept of “Trial by Formula” and recoiled. Class actions cannot be used to extrapolate results from the few to the many:

We disapprove that novel project [referencing a Dukes-specific version of extrapolation]. Because the Rules Enabling Act forbids interpreting Rule 23 to abridge, enlarge or modify any substantive right, a class cannot be certified on the premise that [the defendant] will not be entitled to litigate its statutory defenses to individual claims.

Whoa! The Rules Enabling Act. That's pretty heavy artillery. The Court usually finds some way to avoid going there. Not this time.

As we’ve mentioned in other posts, we once participated in Dukes, but only with respect to punitive damages, an item that was knocked out of the class action before it got to the Supreme Court. But in that last quote, it’s as if the Court were channeling our position on punitives – and expanding it to all class actions. Our position (supported by the holding in Philip Morris USA v. Williams, 549 U.S. 346 (2007)), was that class actions cannot deprive defendants of their right to litigate individualized defenses to punitive damages.

Well, in Dukes, it appears that the unanimous Court has taken that “individualized defense” point and broadened it to all class actions of every sort. To deprive a defendant of individualized defenses would “modify” substantive rights and thus would be an improper application of the class action as a procedural device. While the PM v. Williams holding was narrowly grounded in constitutional Due Process law, by attaching the same proposition to the Rules Enabling Act (the statute that permits courts to promulgate any federal procedural rules), the Court has expanded our right-to-individualized-defenses argument to all class actions, including those involving prescription medical products.

Not a bad decision at all.

American Electric Power v. Connecticut

What we were looking for out of the climate change case was: (1) an application of the “Political Question Doctrine” to curb judicial triumphalism (that is, the judicial tendency to decide issues best left to the other branches of government), and failing that, (2) for the Court to say as many critical things as possible about the plaintiffs’ purported common-law “public nuisance” cause of action.

Well, we got very little on the first point. The Court split 4-4 (Justice Sotomayor was recused) on that issue (phrased as “standing” and also possibly encompassing a variety of other arguments), and thus didn’t decide anything. AEP, slip op. at 6. Later on, there is some language disapproving of judicial triumphalism in the generic sense, but not tied to a specific ruling:

The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. . . . [J]udges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack authority to render precedential decisions binding other judges, even members of the same court.

Id. at 14-15. Nice, but – unlike Dukes – no teeth.

However, as in Dukes, not a single member of the Court was willing to affirm the expansive ruling below, and thus give a green light for private plaintiffs and defendants to litigate climate change in the courts.

Nor did we score much on the second issue. The Court decided that federal environmental statutes had occupied the field, and that eliminated any need to turn to the “unusual” power to create federal common law. AEP, slip op. at 9. Thus the Court did not critique, one way or the other, the merits of a public nuisance cause of action that would (among other things) let courts in one state reach across state lines to enter orders affecting activities in other states.

Rather, the Court posed a couple of interesting questions for the lower courts to chew on: (1) was there even such a public nuisance claim under state law? and (2) if so, was it preempted by federal environmental laws? AEP, slip op. at 15-16. As to the first, we sound like a broken record, but federalist Erie principles should prohibit adventuresome predictions of state law - particularly when the supposed "nuisance" arises from conduct occuring wholly in another, equally sovereign, state. As to the second, the defense will have to cope with Levine and its "clear evidence" test. So what the EPA does in the next year or so will loom quite large.

While AEP was surely a big deal in some precincts, unfortunately it doesn’t turn out to affect our area of the law very much. Such is life in the big city. The remanded questions could, however, prove to be more interesting.